6 Financial Decisions After Losing a Loved One

In the untimely event of losing a loved one, some tough financial choices will follow. Here are some decisions you will have to make in the days following this unfortunate event.

When you lose a loved one, or know you are about to, the last thing on your mind is money. Unfortunately, in the wake of this loss, you will have to respond to any creditors, as well as representatives of insurance companies, your state government, the Federal government, investment companies and a host of other entities, within a timely manner.

This brief guide can help you navigate some of the financial complexities of your dear one's death.

Decide who should get Letters Testamentary or Letters of Administration.

These documents give the holder authority to wrap up the deceased's financial affairs. For example, if you want to take care of the final bills and obligations of your spouse or partner, you must go to your local courthouse with a will or death certificate, and ask for proper documentation to designate you as executor or administrator of the estate.

Select a bank to open an estate account.

You may need this account to pay for funeral expenses and a memorial service, as well as to pay property taxes and income taxes. Contact the IRS to get a tax ID number for the estate, then open the bank account under that number.

Choose who will make sure all death benefits get paid.

Decide whether you, someone you have hired or a family member will look into all death benefits that are due.

Either you or the designated person will find out if there is a pension and/or an insurance policy naming a spouse or other beneficiary, or if there are veterans benefits that are owed.

In addition, you or a designated person would need to apply to the Social Security Administration for a lump-sum death benefit, and any survivor benefits that may be due.

Decide if you are going to hire an attorney.

Though you may balk at the expense, an experienced estate attorney may save you money and headaches, and relieve the burden of navigating through a will or trust. Also, an attorney can inform you of your legal responsibilities if you are executor of a will or administrator of the estate .to potentionly avoid any mistakes by handling these roles incorrectly.

Choose the accounts that need to be closed or assigned to someone else.

For example, these types of accounts may need to be reassigned or closed:

• Bank or credit union accounts
• Credit or debit cards
• Safe deposit box
• Financial accounts (IRA, stocks, bonds, etc.)
• Utilities
• Phone and internet accounts
• Insurance policies

Also note: If your loved one has Social Security checks that are automatically deposited into a checking account, you must notify the Social Security Administration immediately. It is a criminal act to continue to accept Social Security checks for someone who is deceased.

You may want to consider hiring an accountant to help prepare the taxes for your loved one's estate.

A final tax return must be filed, and any taxes due must be paid. In addition, tax laws are complex and change frequently, so an accountant familiar with both federal and state estate taxes and regulations may save you time and money.

Kevin Johnston is a financial writer who writes about personal finance and investments, as well as financial management and planning. He has written for The New York Daily News, The New York Post, The San Francisco Chronicle and The Houston Chronicle.

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